Gold Just Passed $5,000 an Ounce. Should You Invest?

The price of gold topped $5,000 per ounce for the first time ever this past week -- reach as high as $5,300. That's an increase of more than 20% so far in 2026 and 180% over the past five years.

The precious metal's current rise began soon after Russia invaded Ukraine in early 2022 and the U.S. froze Russia's foreign exchange reserves. Spooked by that sanction, the central banks of many countries, including Russia, China, and India, began massive purchases of gold in order to diversify away from the dollar -- and minimize the ability of the U.S. to weaponize the greenback.

Central banks were reportedly buying 80 metric tons of gold a month in 2025, and Goldman Sachs forecasts that buying will average 60 metric tons a month this year.

Trump's policies have supported the gold rally

The policies of the Trump administration have only bolstered the gold rally. They include a dramatic new tariff regime, which has turned many international investors off dollar-based assets and caused the greenback to fall, and President Donald Trump's "big, beautiful bill," which will significantly increase U.S. deficits and has sent many investors elsewhere.

Image source: Getty Images.

The U.S. capture of Venezuelan President Nicholas Maduro in early January, the aggressive push to acquire Greenland, new threats of draconian tariffs on Canada, and the possibility of another government shutdown have also created geopolitical uncertainty in global markets and diminished global demand for dollar-based assets, sending more investors and banks to gold as a safe-haven asset.

The question for investors interested in gold now is: Can the rally continue through 2026? I think it can and will.

Geopolitical uncertainties might even increase in 2026

Uncertainties stemming from the current U.S. administration don't look like they'll abate any time soon, and there may be others added to them. Among the most dangerous of these (and thus the best for the price of gold): A loss of Federal Reserve independence. The White House continues to try to influence monetary policy conducted by the Federal Reserve, including by trying to oust one Fed Board governor and opening a Justice Department investigation against Chair Jerome Powell.

Powell's term as Chair ends in May, and Trump seems determined to replace him with a chair who will aggressively cut interest rates. Not only could that compromise the Fed's independence and further erode global trust in the dollar, a sharp reduction in interest rates poses a huge threat of inflation down the road, which would only increase purchases of gold -- and, thus, its price.

Two good ways to invest in gold are the SPDR Gold Shares ETF (NYSEMKT: GLD), the world's largest physically backed gold fund , and the VanEck Gold Miners ETF (NYSEMKT: GDX), an exchange-traded fund that tracks the overall performance of companies involved in the gold mining industry.

Gold could easily hit $6,000 an ounce by year-end. That makes it a good hedge to have in your portfolio right now.

Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.